Trade Agreements Hung Up on Spending to Train Workers

If it weren’t for one nagging issue, the fight over three pending free-trade agreements would be the debate of the summer.

But that one little matter — an unprecedented showdown between Congress and the White House over the nation’s debt limit — has many of the pivotal players on trade occupied with budget politics, leaving K Street scrambling to ensure that the South Korea, Panama and Colombia pacts don’t wither.

The trade fight itself is not free of its own partisan rancor as Members of Congress and the White House negotiate a deal to provide billions of dollars in federal benefits to people who lose jobs as a consequence of free trade. The talks have been further complicated by a disagreement in the Senate over parliamentary procedure for how that measure, known as Trade Adjustment Assistance, should be considered.

“The principals for the trade deals are also the principals for the debt debate. ... I would hope that they can walk and chew gum at the same time because they have to do both,” said Tami Overby, vice president of Asia for the U.S. Chamber of Commerce, which is behind a huge push on behalf of all three deals.

The chamber this week launched its latest round of advertisements to keep the pressure on Members to pass the South Korea deal. It’s a pivotal time for the pacts because the Obama administration has indicated it wants to send the deals to Congress for consideration this week. Overby said the online effort targets 14 states and 5.8 million people.

Like other interests pushing for the three pacts, the chamber’s lobbyists are a constant presence on Capitol Hill this week. “We have really got to pull out all the stops now,” Overby said. “The coalition’s Hill activities have really been ramped up because we cannot let people’s attention slip now.”

Terry Holt, a former aide to Speaker John Boehner (Ohio) who is now a partner at the public affairs firm HDMK, called the trade pacts winners for both sides of the aisle. And as he works on behalf of the government of Panama, he said he will continue that message on Capitol Hill.

“Trade with these three countries presents opportunities for the American economy,” Holt said.

He conceded that the debt crisis has taken away attention from the trade deals, but he said they will win out. “The debt ceiling debate is sucking all the oxygen out of the political debate on Capitol Hill, but that doesn’t mean we won’t do these trade deals,” Holt said.

In addition to competing with the debt limit situation, Democrats and Republicans aren’t in agreement about what to do with Trade Adjustment Assistance.

The White House and Senate Finance Chairman Max Baucus (D-Mont.) have said they favor including the TAA measure on the South Korea free-trade agreement. But that has raised the ire of several top Republicans, who worry about the spending it would require.

“We have our own problems,” said one lobbyist who is pushing for the trade deals. “All sides have dug in on TAA.”

This lobbyist, a veteran of trade fights, added that the heated debt debate is only adding to partisan distrust on the TAA issue. “It’s putting everything at risk,” the lobbyist said. “There’s frustration and concern that these won’t get done.”

There appear to be two major problems holding up smooth ratification of the trade deals, and the partisan spat over TAA is just one of them. Also at issue is how the measure gets voted on. Republicans in the House have decided to vote on TAA as a stand-alone bill.

But in the Senate, majority Democrats, with the backing of the Obama administration, are pushing for TAA to be included in the Korea pact, resulting in major opposition from the Republicans. The GOP has enough votes to block the South Korea vehicle if the Senate parliamentarian rules that attaching TAA to the legislation makes it subject to a filibuster. Trade pacts are usually simple majority bills that cannot be amended.

The Senate parliamentarian declined to comment Monday on the status of its forthcoming ruling.

Senate Finance ranking member Orrin Hatch (R-Utah) said adding TAA to the South Korea pact would create a bad precedent for future trade agreements, possibly leading to future deals being larded with extraneous policy amendments that would make negotiation and passage difficult.

Hatch, echoing the concerns of other Republicans, also is concerned with the cost of TAA, given the size of the deficit, but he conceded that the impasse could be resolved if Democrats agreed to put the measure up for a vote on a stand-alone basis, as Republicans plan to do in the House.

“The main sticking point is TAA — adding it to a free-trade agreement. That hasn’t been done before,” Hatch told Roll Call on Monday afternoon.

Democrats on the Hill says Republicans are stalling for political purposes.

“Democrats fought for a free-standing TAA for months and it never went anywhere until now suddenly leading Republicans want the vote when they know that TAA could get done as a part of the trade deals,” a Democratic source said.

Another potential sticking point is the insistence by some Senate Republicans, including Minority Leader Mitch McConnell (Ky.), that President Barack Obama and the Democrats agree to extend fast-track trade authority for the president.

Fast track, or Trade Promotion Authority, is generally opposed by labor unions because it gives them less power to bargain with Congress on the makeup of free-trade pacts. It was most recently approved during the administration of President George W. Bush, but it is due to expire. The Colombia, South Korea and Panama deals were negotiated under fast track.